VoiP technology eats into Telkom Kenya’s fixed line call traffic
Photo/File
A woman makes a phone call. The Internet has emerged as a threat to fixed lines.
The use of Voice over Internet (VoiP) technologies such as Skype and Google is eating into Telkom Kenya’s fixed line international call traffic.
A report by industry regulator, Communications Commission of Kenya (CCK), indicates that international traffic on fixed lines has been on a decline, particularly after the vicious price wars triggered by Zain in August 2010 that saw calling rates come down by more than 50 per cent.
International outgoing and incoming traffic through fixed lines dropped by 22 per cent to 11.45 million minutes and 17 per cent to 31.86 million minutes respectively between July 2010 and June last year. But traffic to mobile networks shot up by 91 per cent to 59.3 million minutes.
“The decline could be attributed to a decline in consumers’ ability to pay for fixed international telephone calls.
It could also be ascribed to reduced mobile international voice calling charges and other competing alternatives such as Skype, Gizmo, and Google talk as well as video and instant messaging,” CCK’s report says.
Skype allows a user to communicate with another online using voice-over-internet technology at a very low cost and at times for free.
The users must set up an account and receive an online Skype number.
The users are even able to see each other as they communicate.
The low cost of calling using mobile phones has in the past been the biggest competition to fixed lines, but now other technologies are eating into international voice revenues that the fixed lines used to provide, threatening the old technology even further.
The price war between the four mobile phone operators; Airtel, Safaricom, Yu, and Orange which is owned by Telkom Kenya, has seen international calling rates drop to a low of Sh3 per minute from a high of Sh10.
While the low prices have played a big part in driving international traffic from fixed lines, cheaper online technologies have also seen the need to call abroad on fixed lines fall.
CCK’s report, for the period ended June last year, also notes that the total number of fixed line connections in the country declined to 379,201 from 460,114 in June the previous year. This further dropped by 28,167 to 351,134 lines in September.
Increased competition
The communications regulator attributed the reduction in fixed line services to increased competition from mobile service providers, the high cost of maintaining fixed lines, and the Internet.
The Internet has emerged as a threat to fixed lines, a sharp contrast from the days of Kenya Power and Telecommunication Company’s dominance when fixed lines were the only ones in use.
In an earlier report, CCK said that mobile phone connections between June 2000 and June 2001 shot up from 20,000 to 334,146, surpassing the number of fixed lines at that time which stood at 321,482.
The regulator also started issuing licenses to Internet service providers whose number stood at 23 in 2000 though the Internet, which used satellite technology, was too slow and could not support the kind of applications that are in use today.
However, with the country having put in place three sub-marine fibre optic cables; The East African Marine System (TEAMS), the East African Sub-marine Cable System (EASSy), and the Sea Submarine Communications (SEACOM), Internet speeds have shot up making it easier for clients to use more sophisticated technology.
Kenya continues to witness a vibrant telecommunication sector with the number of mobile subscribers as well as those with access to Internet services growing phenomenally.
Internet use
According to CCK, the number of Internet users increased from 12.53 million in July 2011 to 14.3 million users in September.
“Internet user reached 14.3 million, meaning that 36.3 per cent of the country’s total population has access to the Internet,” the regulator said in its report on the sector’s performance between July and September 2011.
The total number of subscriptions during the period also rose by 27.5 per cent to 5.42 million.
“The period under review witnessed 75 per cent of the total users accessing the service through their mobile handsets, leaving computer and other modes of access with only 25 per cent,” the quarterly report says.
